Freshworks IPO: Everything you need to know about Freshworks

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What does Freshworks do?

Operating with 13 global bases, Freshworks is one of the new breed of software-as-a-service companies that aims to take the pain out of tech for business customers.
It claims to build tech that “works for everyone, making it easy for IT, customer service, sales, marketers and HR to do their job and delight their customers.”

Freshworks is particularly adept at customer management, hosting messaging platforms and an AI-powered chatbot for customer support.

Its 50,000 customers include Bridgestone, Klarna, ITV and Vice Media. Having been founded in 2010 by Girish Mathrubootham and Shan Krishnasamy, Freshworks has come a long way since its launch out of Chennai, one of India's most important tech hubs.

How does Freshworks make money?

Freshworks makes money through the software-as-a-service model, an increasingly popular method of delivering tech to customers.

Software-as-a-service provides massive advantages compared to installation-only software as the tech is managed on the cloud, updated automatically and is largely virus-proof.

As of September 2021, the UK-facing site of Freshworks charges £12, £35 or £60 a month depending on a customer’s depth of requirements.

Add-ons are available including chatbot sessions, as well as packages for employees working in the field who may need to log in from a wide range of IP addresses and requiring additional functionality.

What is Freshworks’ business strategy?

Freshworks has made expansion of its partner network a key element of its growth strategy, according to the IPO prospectus filed with the U.S. Securities and Exchange Commission. It plans to invest more money and resources into growing its channel partnerships. It already has relationships with 400-plus channel partners around the world.

It also has deals with around 350 independent software vendors, plus integrations with platforms such as Slack and TeamViewer.

In a statement, Freshworks said: “We believe that continued growth in our business is dependent upon identifying, developing, and maintaining strategic relationships with additional channel partners that can drive substantial revenue.”

Freshworks has been quiet on the acquisition front since July 2020, when it bought up its most recent company. That was Flint, an IT orchestration and cloud management platform.

Is Freshworks profitable?

It is unclear whether the entire Freshworks operation has achieved profitability as yet, but annual revenue is growing rapidly year-on-year.

In 2020, it surpassed $300 million in annual subscription revenue for the first time, up approximately 40% year-on-year. Customers in healthcare, education and government were quick to sign up to subscriptions.

The Indian wing of the company, Freshworks Technologies Pvt Ltd, has been profitable since 2018.

Board of Directors of Freshworks

• Girish Mathrubootham, Co-founder and CEO
• Roxanne S. Austin, President and CEO of Austin Investment Advisors
• Johanna Flower, former Chief Marketing Officer of CrowdStrike
• Sameer Gandhi, a partner of Accel, a venture capital firm,
• Randy Gottfried, former Chief Financial Officer of AppDynamics
• Zachary Nelson, former Chief Executive Officer at NetSuite
• Barry Padgett, Chief Operating Officer for Amperity